Hi, I’m Dan Kuperstein, and welcome to ComplianceMINUTE.
On May 4, 2017, the House of Representatives passed an updated version of the American Health Care Act (or AHCA), the bill designed to replace many of the provisions of the Affordable Care Act (or ACA). However, “replace” is probably not the best word. While the AHCA guts or delays several of the ACA’s most significant taxes on employers, insurers and individuals, it still leaves more than 75% of the ACA intact.
But for today’s episode, let’s focus in on some of the biggest changes relevant to employers. Among other changes, the AHCA does the following:
- Eliminates the ACA’s Employer Shared Responsibility tax penalty (commonly referred to as the “employer mandate” or “Pay or Play”), effective for tax years after December 31, 2015.
- Delays the so-called “Cadillac Tax” on high-cost employer-sponsored coverage until 2026 by eliminating its tax penalty for years 2020 through 2025.
- While it does not eliminate the ACA information reporting requirements, it does add an additional Form W-2 field to account for each month with respect to which an employee is eligible for a group health plan.
- Eliminates the cap on contributions to health FSA accounts
- Raises the tax-free contribution limit to health savings accounts (HSAs) to match the out-of-pocket cost maximum on high deductible health plans (HDHPs) and adds other provisions to make HSAs more flexible. (See our BeneMINUTE video on Controlling Costs with HDHP and HRA).
- Eliminates the ACA’s requirement that health insurance plans in the individual and small group markets offer insurance plans designated by four standard levels of coverage called the “metallic tiers” of coverage.
- Eliminates the insurance providers’ fee that is paid by insurers and employers sponsoring fully-insured health plans.
As employers know from working over the last seven years to implement provisions of the ACA, there will be a million tiny details to work through if the AHCA becomes law, and of course, that’s a big “if.” As of May 22nd, the bill still has to get a CBO score. If the CBO score shows that the bill doesn’t save at least $2 billion, then it will have to be voted on again by the House before it can go to the Senate under the budget reconciliation rules. Then, the bill still has to go through the Senate, where only 3 “no” votes could defeat it. So, as of today, there is still a long track to tread for this bill.
For more information on this and other ACA topics, visit our Knowledge Center at corpsyn.com. Thank you.